APO

Apollo House, 7 Institutional Area, Sector 32, Gurgaon 122001 Haryana, India T: +91 124 2721000

TO WHOMSOVER IT MAY CONCERN

This is to certify that Mr. Prahlad, a student of Master of Business

Administration, has successfully completed his two month Summer

Training with effect from 10th June 2010 to 5th Aug. 2010, in the field of

Marketing under our guidance.

During this period his commitment and dedication has been highly

appreciated in the Organization.

We wish him a bright and prosperous future.

For Apollo Tyres Limited.

Mr. Ajay Wadhawan

District Incharge,

Apollo House

Sector 32, Gurgaon,

7 Institutional Area Sector 32, Gurgaon 122001 Haryana, India T: +91 124 2721000

Dated : 06-Aug-2010

ON

“MARKETING”

Submitted in partial fulfillment of the requirement of the award of

Degree in Bachelor in Business Administration

FromMaharishi Dayanand University, Rohtak

B.B.A (VTH) SEM

(2010)

ADVANCED INSTITUTE OF TECHNOLOGY & MANAGEMENT, DELHI

SUBMITTED TO:Lecturer in Management Mr. Brijesh Bhardwaj

SUBMITTED BY:ARUN KUMARRoll No: BB08004Regn no. 08-AITF-4304

MATHURA ROAD, PALWAL, FARIDABAD.

ACKNOWLEDGEMENT

This project is the result of contribution received from a number of

people, both implicitly and explicitly. Never can it be claimed as my

individual effort. No amount of words written will be enough and

adequate to acknowledge all the people who offered their help and

support while preparing this report.

First and foremost I offer my gratitude to Mr. Girish Chandra

Das ,rict Manager, Apollo Tyres ltd. My organizational guide, for giving

me opportunity to work for the organization. I am extremely thankful to

him for his untiring support, guidance and valuable suggestions and

sincerely appreciate his efforts in ensuring enough exposure to learn

as much as possible during the six weeks at Apollo Tyres Limited,

Gurraon.

[Arun Kumar]

DECLARATION

I hereby declare that the work which is being presented in the project

report entitled MARKETING in the partial fulfillment of the requirement for

the award of Bachelor of Business Administration from Advanced

Institute of Technology & Management, Delhi Mathura Road, Palwal,

Faridabad is record of my own work and was carried for a period of six

weeks under the guidance of to Mr. Girish Chandra Das ,Rict Manager, Apollo

Tyres ltd of commercial work of Marketing Department Appolo Tyres Ltd

India.

Arun Kumar

B.B.A 5th Sem.

PREFACEPREFACE

It is integral part of our BBA Program to undergo TRAINING in a

business organization with objectives as understated:

To acquire a better understanding of business environment under the

professional guidance of practicing.

To blend the practical experience acquired in the business concern

with the theoretical knowledge received in classrooms and apply them

in actual business situations soon after the completion of BBA

program.

To perform a propound analysis of functioning of various departments

of the business concern where I undergo the training.

In order to achieve the above mentioned objectives my training

was arranged in “Apollo Tyre Ltd. Gurgaon”.

CONTENT

Page No.Chapter I: EXECUTIVE SUMMARY............................................21.1. Objectives:..............................................................................21.2. Scope:....................................................................................21.3. Limitations:.............................................................................21.4. Methodology:.........................................................................21.5. Findings:.................................................................................21.6. Suggestions:...........................................................................2Chapter II: PROFILE OF THE COMPANY...................................22.1. The Apollo Vision:...................................................................2

2.2. Core Values:...........................................................................2

2.3. Apollo’s Goals:........................................................................2

2.4. Brief History Apollo Tyres Ltd.:...............................................2

2.5. Highlights:...............................................................................2

2.6. General information:...............................................................2

2.7. A profile of its operations in the North- East:..........................2

2.8. Fact file:...............................................................................22.9. After sales service at Apollo Tyres Limited:............................2

2.10. Organisational chart of Apollo Tyres Limited:................22.11. A brief description of pneumatic tyres:..................................2

2.12. Product profile:...................................................................2Chapter III: RESEARCH METHODOLOGY.................................23.1. Objective:..............................................................................23.2. Scope:...................................................................................23.3. Type of data:........................................................................23.4. Methodological sequence:..................................................2Chapter IV: OTHER MAJOR CORPORATE PLAYERS..............24.1. MRF Limited:..........................................................................2

4.2. J.K. Industries Limited:..........................................................2

4.3. CEAT Limited:.........................................................................2

4.4. Goodyear India Limited:..........................................................2

4.5. Birla Tyres:............................................................................2

Chapter V: FINDING AND ANALYSIS.........................................25.1. From the fitment survey:.........................................................2

5.1.1 Market share of HCV tyre................................................................25.1.2 Market share of LCV Segment.........................................................25.2. From the customer survey:.....................................................2

5.2.1 For best mileage:.............................................................................25.2.3 Rankings for best retreadibility:......................................................25.2.4 Rankings for Least Probability of CUT EXPANSION:....................25.2.5 Rankings for Least probability of air formation:.............................2

5.2.6 Rankings for best tyre for heavy loading:........................................25.2.7 Rankings for best Claim Settlement and After Sale Policy:.............25.2.8 Rankings for best Sales Promotion Devices.....................................25.3 From the Dealers Survey:........................................................2

5.3.2 Findings from the 4 point Liekart Scale...........................................25.3.3 Growth of HCV tyre Industry in North-East Market:......................2Chapter VI: SWOT ANALYSIS.....................................................26.1 Strengths:..............................................................................26.2. Weaknesses:........................................................................26.3. Opportunities:.......................................................................26.4. Threats:.................................................................................2Chapter VII: SUGGESTION AND CONCLUSIONS.....................27.1. Suggestions............................................................................2

7.2. Conclusions:...........................................................................2

BIBLIOGRAPHY................................................................................2Appendix I: QUESTIONNAIRE......................................................2Appendix II: QUESTIONNAIRE.....................................................2Appendix III: DISTRIBUTION NETWORK.....................................2Appendix IV: FINANCIAL RESULT...............................................2Appendix V: FITMENT CHART......Error! Bookmark not defined.

Chapter I:

EXECUTIVE SUMMARY

Author: Mahan Jyoti Kashyap

New Delhi Institute of Management,

Tughlakabad Institutional Area, New Delhi-62.

Project Title: Market growth of Apollo Tyres Limited vis-à-vis other tyre

companies in the North-East market (in the HCV tyre

segment).

Organization: Apollo Tyres Limited, Guwahati.

Duration: 2 months (3rd May- 3rd July, 2004).

Organizational Guide: Mr. Girish C. Das

District Manager

Apollo Tyres Limited, Guwahati

1.1. Objectives:

(a) To analyse the market growth of Apollo Tyres Ltd. from

2000-01 to 2003-04 in the HCV tyre segment in the North-East

market.

(b) To determine the present market share of the major players in

the North-East market.

(c) To study the purchase parameters and after sales service

provided by Apollo Tyres Ltd.

1.2. Scope:

To aid in formulating a marketing strategy that would help in

further consolidation and expansion of customer base of Apollo Tyres

Ltd. in the North-East market.

1.3. Limitations:

Sampling error might have occurred because no sample is a

perfect representation of a given population unless the

sample size equals the population.

Response error might have occurred. Respondents-

intentionally or unintentionally might have provided

inaccurate answers to the survey questions.

Non-response error might have occurred because some of

the respondents contacted provided an incomplete or no

response to some questions mentioned in the questionnaire.

Respondents did not respond to those questions because

they were unwilling to disclose the related data or

information.

1.4. Methodology:

(a) Research Approach: Primary data collected by Survey Research

Method.

Secondary Data collected from product

catalogues and business journals.

(b) Research Instrument:

Questionnaire method.

Personal Structured Interview Method.

(c) Sampling Plan:

1. Sampling Units:

Major tyre Companies

Dealers of HCV tyre.

Customers of HCV tyre.

Truck/bus drivers.

2. Sample Size:

Tyre companies: 6 Nos.

Dealers of HCV tyre: 45 Nos.

Customers of HCV tyre: 45 Nos.

Truck/bus drivers: 120 Nos.

3. Sampling procedure: Convenience sampling as well as

judgment sampling.

1.5. Findings:

1) The total market potential per month for HCV tyre in the

North-Eastern region has increased from an average of

12,000 tyres in 2000-01 to an average of 17,000 tyres in

2003-04.

2) Company-wise , Apollo Tyres Ltd. has the largest market

share of 30% closely followed by MRF Ltd. with 23%

market share respectively.

3) Apollo Tyres has the largest number of dealers in the

North-East.

4) Apollo Tyres has been able to increase its market share

from 12% in 2000-01 to 30% in 2003-04 in the HCV tyre

segment.

5) Reasons for achieving market growth by Apollo Tyres Ltd. :

a) Large exclusive dealer network.

b) Better tyre quality and performance.

c) Advertisements

d) Thrust on overloaded Segment

e) New generation of tyre dealers.

f) Dealer friendly policies.

g) Customer friendly policies.

1.6. Suggestions:

Rebuilding of brand image.

Importance of relationship building with dealers and

customers.

Efforts to differentiate its products from competitors.

Apollo Tyres should give more emphasis on advertisements.

Apollo Tyres should concentrate on increasing its exports.

Opening of more offices in the North-East.

Serving customers through Internet and banking facilities.

Sufficient number of efficient technical manpower should be

introduced.

Entering into the two/three wheeler tyres segment.

Apollo tyres should introduce a Central Call Cell with a single

access number for its customers.

Apollo Tyres needs to emphasise on the export market of

tyres.

Chapter II: PROFILE OF THE COMPANY

2.1. The Apollo Vision:

‘A Leader in the Indian Tyre Industry

And A Significant Global Player,

Providing Customer Delight

And Enhance Shareholder Value.’

2.2. Core Values:

C - Care For Customers

R - Respect For Associates

E - Excellence Through Teamwork

A - Always Learning

T - Trust Mutually

E - Ethical Practices

2.3. Apollo’s Goals:

5 Y H K

Achieve by 2005-06

A Gross profit of Rs. 500 Crores

And a Turnover of Rs 5000 Crores

2.4. Brief History Apollo Tyres Ltd.:

Inspired by the Greek Sun God ”Apollo”, Apollo Tyres Limited has

created a remarkable identity of its own style in the Indian tyre market.

So much so that the name itself has become synonymous with the

brand. A marginal player in the tyre industry a decade ago, Apollo

Tyres leads the replacement market in the heavy vehicle and car

radials segments. It has achieved this trough acquisitions and contract

manufacturing.

The history of Apollo Tyres limited can be traced back to the 1970s,

when uncompromising MNC’s and Indian tyre majors dominated the

tyre industry. Since its incorporation in 1972, Apollo had to suffer huge

losses in its infant years, owing to the fact that all tyre majors had high

production capacities as compared to the market demand. Within a

decade though backed by its strong production and marketing

strategies, Apollo had catapulted itself among the top tyre companies

of the country. Thanks to its state-of-the art technology, goal oriented

people and clear, adventurous vision of the top management, Apollo

has become a name to reckon with, not just in the nylon, but also in the

radial tyre segment.

Change is something Apollo as a corporation has always been

comfortable with and never feared. Years ago, with a view to position

itself in the premium tyre segment, Apollo decided to price its brands

reasonably higher than its competitors. It thus target a customer

segment for which price was almost a non issue. The key criterion was

product benefit. Premium branding led to to the development of a niche

that compromised those who looked for the best tyre and not

necessarily the best bargain. This made the company less vulnerable

to recessionary trends in the years to come. In the recent times,

however, while the industry has been the crying wolf, Apollo has

comfortably weathered the storm of recession. Little wonder then, that

customer loyalty to Apollo brands has become legendary.

With the kind of progress Apollo has made since its incipient years,

it is difficult to believe that it has been around for a little over two

decades. Now at a shimmering 29, Apollo has been plucky and spirited

enough to give its competitors sleepless nights. Believing firmly in the

philosophy of ‘always looking for new answers’, today’s tyre giant

Apollo has all along envisioned action that would challenge the

conventional wisdom of the tyre industry. Call it holistic thinking or

innovative marketing strategies, as a corporation; Apollo has always

thrived on huge challenges so as to turn them around to its

advantages.

2.5. Highlights:

Fastest growing tyre company in India in the HCV

segment.

Eighteenth largest tyre company in the world.

First tyre company in India to obtain ISO 9001

certification for all of its operations.

First tyre company to introduce packaging for tubes, 2

wheeler tyres and car tyres.

First tyre company with more than 100 sales & service

offices in India

The tyre company to have the concept of exclusive

showrooms for HCV tyres, called the ‘Apollo Tyre World’.

The tyre major with the largest number of

management professionals in India.

2.6. General information:

Incorporation: 1972

Technical collaboration: With Continental AG of Germany,

the fourth largest tyre company in the world.

Present Network of Manufacturing Locations:

1. Perambra, Cochin, Kerala

Manufacturing truck, LCV and Farm tyres.

2. Limda, Gujarat

Manufacturing truck, radial & OTR tyres.

3. Pune, Maharashtra

Manufacturing tubes.

4. Kalamassery, Cochin, Kerala

Premier Tyres Factory (Premier is a subsidiary

company)

5. The Company has conversion facilities at:

S.Kumar in Indore, Madhya Pradesh

and TCIL Kolkata, West Bengal.

2.7. A profile of its operations in the North- East:

Apollo Tyres Limited started its operations in the North-East in the

year 1976.The company’s regional office is situated in Guwahati and

has three C&F offices in Shillong, Agartala, Dimapur and Tinisukia

(proposed) respectively.

The company carries out its operations in the North East through

125 dealers. Guwahati itself comprises of 35 dealers. In an attempt to

increase the present market share the company employs various

promotional strategies such as Sales promotional schemes, customer

meet, dealers meet and advertisements.

2.8. Fact file:

Average monthly sale in the North- East acc. to the

company in the year 2004

Table 2.1. Average monthly sale in North-East

Type of tyre Units

HCV 5100

LCV 1225

RADIAL (passenger) 1100

BIAS (passenger) 850

Number of dealers :

Guwahati - 35

Entire North-East- 90

(The company has around 25 exclusive dealers for its HCV tyres and 9 for non-truck tyres.)

Average Turnover in 2003-04: Rs 1 Crore

Market share in 2003-04:

.

Table 2.2: Market share of Apollo Tyres Ltd.

Type of tyre Market shareHCV 30%

LCV 20%

Passenger (bias) 15%

Passenger (radial) 18%

Distribution Network:

Manpower:

State In charge: 1

District Manager: 1

Technical Officer: 1

Marketing Executives: 4

C&F Inchargeg: 3 1

2.9. After sales service at Apollo Tyres Limited:

After sales service is an important parameter on the basis of which

a customer purchases a product. To remain ahead of competitors a

company needs to have an extensive network of dealers and service

personnel who ensure that their products function without any technical

problem for a longer period. Therefore mobile well trained service

personal to provide quick after sales service has become a necessity.

Factories Regional Despatch Center

Eastern India Offices

The after sales service provided by ATL can be broadly categorized

into the following:

Advising customers on tyre care:

The after sales service department gives the customers

various tips on how to increase the life of his tyres. If he is facing

any problem with regard to the performance of his tyres, the

service personnel will look into the problem and try to eliminate it

and give him necessary advice. Incase of service abuse of tyres

by the customer, the service personnel will explain the cause of

service abuse to the customer.

Advising the customer to select the type based on loading

pattern:

In case of heavy commercial vehicles, there are different

types of tyres for different loading patterns. The department also

helps the customer to select the type which best fits into the

pattern of loading that he prefers in his vehicle.

Replacing tyres with manufacturing defects:

If any tyre does not give full service to the customer due to

manufacturing defects, then that tyre is replaced. The truck tyres

of ATL have a warranty period of two years against all

manufacturing defects. The car radial tyres have unconditional

warranty for perid of three years or 50% treadwear whichever is

earlier.

Calculation of payment of claim on used tyres

If the tyre does not give full service during the warranty

period due to treadwear or suffers any kind of damage, then

discount of certain percentage of new tyre value compensates

the customer. For example, if a tyre undergoes 50% treadwear

within the warranty period, then the customer ill get a claim of

50% of new tyre value. That means, while buying new tyre, he

has to pay only 50% of the new tyre.

Customer friendly policies on claims for used tyres

ATL has many customer friendly policies in case of claims

on its used tyres. Some of them are briefly described below:

1. In case of above 85% treadwear, the value of the casing

will be evaluated and the customer will get a claim of up

to 15% of new tyre value.

2. In case of concussion of tyres in the overloading segment

(10.20-18 Loadstar Super), the customer will get a claim

of upto 50% treadwear on pro-rata basis.

3. In case of lock-ring damage (that is caused due to

improper fitting of the lock- ring which damages the

bead), the customers get benefit up to 50% treadwear on

pro-rata basis.

Processing of claims at Apollo Tyres Limited :

When a customer makes a claim, he has to go through a

few processes like serial number verification, customer

verification etc.

The customer then has to bring the tyre to the company’s

godown at Guwahati where the technical service engineer

examines the tyre. The results of the evaluation are given within

two or three days. If the claim is to be adjusted, the carrying cost

of the tyre to the godown is borne by the company. For

collecting the claim, the customer can either come to the

Guwahati office or receive it by mail.

SHILLONG C&FAGARTALA C&FTINSUKIA C&F

MANAGING DIRECTOR

VICE - PRESIDENT (MARKETING)

GENERAL MANAGER

DEPUTY GENERAL MANAGER

REGIONAL MANAGER

STATE IN-CHARGE

S.O/COMMERCIALSTAFF

DISTRICT MANAGER

2.10. Organisational chart of Apollo Tyres Limited:

2.11. A brief description of pneumatic tyres:

2.11.1. What is a pneumatic tyre?

A pneumatic tyre is a torrodial-shaped flexible high performance

composite membrane containing air or fluid under pressure when

mounted on a suitable rim. It is made of an elastic material, natural or

synthetic or a blend thereof, reinforced with textile cord ply fabric

TECHNICALOFFICER

MARKETINGEXECUTIVE

ZONAL MANAGER

carcass (or steel for some ranges of radial ply tyre ) enclosing bead

rings. In a Diagonal ply (also called Bias ply) tyre, the carcass ply cords

extend to the beads diagonally to form a structure; in a Radial ply tyre,

the ply cords are laid substantially at 90 to the centre line of the tread,

the carcass being stabilized by an essentially inextensible

circumferential belt.

2.11.2. Functions of a pneumatic tyre:

For a better understanding of the pneumatic tyre it is important to

know the various requirements expected out of it. There are certain

basic performance requirements, which are found to be essentially the

same for all types of pneumatic tyre, even though their relative

importance differs with each type. There are other features, which are

distinctly depending on the kind of tyre and their service condition. It is

these features that makes an aircraft tyre different from an earthmover

tyre or a drive tyre from a steering tyre.

2.11.3. Basic tyre requirement:

1. Cushion the vehicle ride:

A pneumatic tyre is the first line of defense against road shocks

and its unique property of cushioning provides comfort. Cushioning

is imparted by the air and ability of the tyre membrane to deform

radially.

2. Carry the load: -

A pneumatic tyre must carry the load when mounted on rim and

inflated to the required pressure. In other words pneumatic tyre

must form an air container of adequate strength disposed in the

radial direction to hold the air pressure acting radially.

3. Transport the load:

While doing so a pneumatic tyre is required to transmit engine

torque and braking torque efficiently to the ground, to put the

vehicle in motion. Good tyre to road grip coupled with adequate

strength disposed in the circumferential direction underneath the

tread of the tyre is required for efficient transporting.

4. Develop adequate cornering force:

It is this unique ability of a pneumatic tyre, to develop adequate

cornering force to counter the centrifugal force or any other lateral

forces like wind force and retain the vehicle on the road while

negotiating curves etc. that enabled the development of the road

transport industry. Excellent grip combined with its ability to

undergo lateral deformation helps the pneumatic tyre to develop

cornering force.

5. Economic performance:

Every revolution of the tyre leads to periodic strain radially,

circumferentially and laterally and these necessitate adequate flex

fatigue life for the materials and the structure and wear resistance

for economic service life.

In addition to these general requisites, today’s tyre must meet

the various standards laid down by the vehicle manufacturers and

customers. Thus a rear tractor tyre should have the capability to

transmit high torque efficiently on loose soil and give adequate

floatation. An aircraft tyre needs to be as small and light as possible

and at the same time should have high load carrying and speed

capability, high impact resistance and excellent directional stability.

To cite a few of the specific requirements – directional ability, rolling

resistance, impact resistance, speed capability, run flat resistance,

puncture resistance, weather resistance, retreadability, mileage, low

costs, crack resistance, floatation, grip in loose soil, noise

resistance etc.

2.11.4: Definition & functions of various components of a tyre:

1. Bead:

The part of a tyre that is so shaped as to fit the rim and

hold the tyre onto it. It has cores made of several strands

inextensible steel wire with end of the piles wrapped around

the core for anchorage.

2. Sidewall:

The part of the tyre between the bead and tread which

flexes in service.

3. Sidewall rubber:

The rubber layer on the sidewall of the tyre and covers

the carcass, which include protective ribs and fitting to assist

in centering of the tyre on the rim. This protects the tyre from

scuffing and damages.

4. Tread:

This is the part of the tyre, which comes in contact with

the ground and through which the driving, braking and

cornering forces are transmitted. It is made of special rubber

compound to give good wearing properties and in

conjunction with tread pattern to transmit these forces.

5. Cord:

Textile or non-textile strands (threads) used in various

components of the tyre carcass, poles, belts, breakers, etc.

6. Ply:

A layer of rubber coated fabric cords.

7. Carcass:

The rubber-bonded cord structure of a tyre integral with

the bead, which provides the requisite strength to carry the

load.

8. Breaker (Diagonal):

Intermediate rubberized fabric layers/plies between the

carcass and the tread, which helps bonding as well as

protects the casing from shocks.

9. Belt (radial):

Layers of rubberized material under the tread with cords

laid substantially in the direction of the tread of the center-

line that restricts the carcass in the circumferential direction

and stiffen the tread area.

2.11.5. Types of tyres (Construction):

1. Bias tyre (Diagonal or Crossply)

A pneumatic tyre in which tyre ply cords extends from

bead to bead and are laid at alternate angles and is less than

90 degree to the center line of the tread.

2. Radial tyre

Pneumatic tyres in which the ply cords extend to the

beads are laid substantially at 90 degree to the center of the

tread. Carcass is stabilized by inextensible circumferential

belts.

2.12. Product profile:

Apollo tyres have three major product categories. They are tyres for

Heavy Commercial Vehicles, Light Commercial Vehicles and

Passenger Car Vehicles , also manufactures Jeep and tractor tyres.

The following table gives the list of the various products under each

category.

Table 2.3 : Product categories

Tyres for HCV Tyres for LCV Tyres for passenger

car

Amar DLX

Amar

Amar-Express

Amar-AT Rib

Amar-Super Rib

Amar-3 R

Loadstar Super Gold

Loadstar Super

Loadstar Super

Hercules

XT-7 Gold

XT-7

XT-7 Haulug

XT-9 Gold

XT-9

Champion-Gold

Champion

ST-5

KZ-99 R

KZ- 77 R

KZ-50 L

KZ-36 L

KZ- Commando

KZ- XDT

KZ-27 L

KZ- 32 S

Amar Delux

Amar LT

Dhruv TT

(0 Deg taper)

Dhruv TT

(5 Deg taper)

Duramile

Loadstar Super

Milestar

Milestar LT

XT-9

Farm Tyres

Sarpanch

Krishak Super

Krishak Premium

Power Haul

Dhruv

Kissan Adv Plus

Bhim

Amazer

Amazer XL

Armour

Strom

Jeep Tyres

Gripper

Maha Trooper

Trooper

Hunter

Panther

Armour

Chapter III: RESEARCH METHODOLOGY

3.1. Objective:

1. To analyse the market growth of HCV segment of Apollo

Tyres Ltd. from 2000-01 to 2003-04 in the North-East

market.

2. To determine the present market share of the major players

in the North-East market.

3. To study the purchase parameters and after sales service

provided by Apollo Tyres Ltd.

3.2. Scope:

To aid in formulating a marketing strategy that would help in further

consolidation and expansion of customer base of Apollo Tyres Ltd. in

the North-East market.

3.3. Type of data:

Primary data was collected to satisfy the above stated objectives.

Secondary data was also referred to gain a better insight into the

problem at hand.

3.4. Methodological sequence:

The research project consists of the following methodological

sequence:

3.4.1. Choice of the research design:

The research design that has been adopted for the purpose of the

project is of descriptive nature since the focus is on the discovery of

ideas and their study. The project study is of quantitative in nature

based on the interview conducted among the Dealers, Drivers/Owners

and Fitment Surveys and discussions with other companies.

3.4.2. Determining the source of data:

Since only primary data to be collected, the source of data is based

on the information provided by the respondents.

3.4.3. Data collection methods and instruments:

During the period of data collection, Initially it was decided to do

separate surveys on the dealers, customers/drivers and another survey

by visiting the company offices. By visiting the company offices we also

wanted to find out the market share of every player. But while

conducting the company survey, we felt that the data could be biased.

So after discussions with the management, it was decided to conduct a

fitment survey in the truck stands in Guwahati, Nagaona and Hojai.

Different parts of Greater Guwahati, Nagaon, Hojai, Tinsukia, Itanagar,

Dimapur were covered for the purpose of other data collection. The

data collection was done not only through the filling of the structured

questionnaires but also with depth interviews, to analyze the reasons

for the ranking given and better understanding of the problems. The

data was collected till the end of the second week of June, and

thereafter the analysis was done and recommendations made taking

into consideration the views of the customers, the depth interviews of

the dealers that gave good insight on the customers’ attitudes and

reasons for the rankings given by the customers to the brands,

discussions with the management of Apollo Tyres as well as its

competitors and some secondary data mainly provided by Apollo

Tyres.

3.4.4. Preparation of questionnaire:

The primary data was collected strictly through well-structured

questionnaire. Two questionnaires were prepared where one in context

with the dealers and the other for the drivers/owners of the vehicle

including the fitment of tyres. The questionnaire was prepared on the

basis of the objectives and the problem studied. It was designed in

such a way that the respondent would have no inhibition in expressing

his/her view frankly. The form of the questionnaire can be as follows:

1. Most of the questions were of the multiple-choice types in

which the respondents simply needed to

put tick mark in the appropriate box. This was done for the

respondents’ convenience and also to get rid of their attitude of

skipping important questions. Also, questions were designed

keeping in mind that the dealers might be reluctant in giving

information like sale figures, profitability. So, sensitive

questions were placed at the later half of questionnaire.

3. Rating scale is used for the opinion of the Dealers having

Excellent, Good, Average and Poor as different scales.

4. One open ended question needing respondents to describe

their views freely in their own words was also included

5. Dichotomous questions were also included.

3.4.5. Pilot survey:

The pilot survey was conducted on 5 respondents of each

questionnaire and certain changes were incorporated that were

essential before administering the final one. Based on the pilot survey

the following modifications were included:

1. An error was detected where it was not stated whether one

could give same ranking to another brand or not. This error

was corrected in the new questionnaire for Dealers.

2. Counter potential of the dealers was first given in the range of

20 scales but after pilot surveying it was found that it varies in

large quantities and so, it was modified to contain exact

quantity.

3. Remarks of the Dealers were not included initially.

4. After interviewing the Dealers some categories in the opinion

of the dealers were skipped such as profitability, sales

promotion and channel strategy.

5. Remarks was added in the Questionnaire for the

Drivers/Owners as they were commenting something extra

which was not included in the questionnaire.

3.4.6. Selection of sample:

1. Sampling Units:

a. Dealers of HCV tyres.

b. Drivers/Owners.

c. Major tyre companies.

2. Sample Size :

a. Tyre companies - 6

b. Dealers of HCV tyres - 41

c. Truck/Bus Drivers - 112

3. Sampling Procedure:

Sampling was done through convenience sampling

as well as judgment sampling.

3.4.7 Data Analysis Technique:

Data was analysed with the help of softwares like MS Excel and MS

Word. The questions were coded in MS Excel’s Spread Sheet and

thereafter they were analysed and put in a Graphical Format for a

better understanding. The qualitative data collected through interviews

were analysed through discussions.

3.4.8. Limitations of the project:

100% response rate was not found from the customer.

Approximately 97% of the questionnaire was found

complete and 3% was incomplete, which were later

phased out

Sampling error might have occurred because no sample

is a perfect representation of a given population unless

the sample size equals the population

Response error might have occurred. Respondents

intentionally or unintentionally might have provided

inaccurate answers to the survey questions.

Chapter IV: OTHER MAJOR CORPORATE PLAYERS

4.1. MRF Limited:

A leading company in the tyre industry, MRF Ltd. boasts of an

enviable track record. Established in the year 1946 at Chennai the

company has continued in the same vein and has been posting

excellent results, notwithstanding the winds of recession blowing

across the economy. Performance of the company has been

commendable in light of the fact that the user industry is facing a

slowdown. The company has benefited from better productivity and

operational efficiency. The company caters to a host of impressive

clients. It has signed on to be the sole supplier for auto giants like

General Motors, Fiat and Ford in India. The company is also renowned

for its exports, which have also been witnessing positive growth.

MRF tyres are exported to many countries worldwide and it is the

first Indian company to manufacture Formula Car (Racing) Tyres. The

grueling racetracks have been the laboratories for testing its tyres.

4.1.1. Operation in North–East India:

Regional Set-up: The company has a district office at Guwahati

and C&F offices at Shillong , Agartala , Dimapur and

Bandardowa.

GODOWN DEALER NETWORK


(The company operates through C & F agents in the North-East)

Organizational Set-up:

Operational Staff: 8 Employees

According to the company the total market potential of North-

East for various tyre segment in 2004

Table 4.1: Tyre potential of North East acc. to MRF

Type of Tyre Qty. (In Nos.)

HCV 17000(App.)

LCV 6200(App.)

Passenger Radial 6000(App.)

Passenger Bias 8700(App.)

FACTORY

DISTRICT MANAGER

SUB DISTRICT MANAGER

SERVICE ENGINEER

SALES REPRESENTATIVE

Average Monthly Sales in 2003-04

Table 4.2: Average monthly sales

Type of tyre Qty. (In Nos.)

HCV 4000 (App.)

LCV 1735(App.)



Average monthly market share of HCV tyre : 23%

The company considers Bridgestone, JK tyres and Apollo Tyres

Ltd. as it nearest competitor.

Average yearly sales in the last three years:

Table 4.3. Yearly sales in last three years

Type of Tyre 2001 2002 2003

Truck Tyre 33000 37950 43640

Radial tyre 6000 7200 9600

4.1.2. SWOT analysis of MRF Ltd:

Strength: Quality, wide range of tyres, brand

preference, customer awareness, wide

dealer network and operational

efficiency.

Weakness: High price, little incentives to dealers

and less promotional activities.

Opportunities: Revival of the auto industry will lead to

better opportunities in the radial tyres

and truck segment.

Threats: Tough competitions from the

competitors like Apollo and JK tyres.

4.2. J.K. Industries Limited:

JK Tyre is a leading radial manufacturer and the first in the world to

be awarded the QS 9000 for multi-location operation. It is also the first

tyre manufacturer in the world to get the ISO 9001 certification for its

entire operation in one go. JK tyre produces and sells tyres and tubes

under the brand name "JK Tyre" for Truck, Buses, Passenger Cars,

Jeeps, Light Commercial Vehicles, Multi Utility Vehicles and Tractors.

The company pioneered Steel Radial Technology in India in 1977 and

continues to be the industry leader in the Radial segment in India. JK

Tyre is the only Tyre Manufacturer in the country to produce high

performance 'T' & 'H' -rated steel radial.

JK Tyre has consciously followed a policy of continuously

modernizing and expanding its tyre manufacturing facilities to retain its

edge in the market place. JK Tyre has a worldwide customer base in

over 45 countries across all 6 continents.

To keep pace with the market demand as well as technological

leadership in Indian market, J.K. Industries acquired Vikrant Tyres

Limited, Mysore in 1997. J.K. Industries and Vikrant Tyres Limited are

the only tyre companies in India to have received all three ISO 9001,

QS 9000 and ISO 14001 certificates. The company has a technical

collaboration with M/s Continental AG, Germany, which is among the

top five tyre manufacturers in the world to keep pace with latest

technological developments.

To stay at the forefront of technological advancements a state of art

Research & Development Centre, HASETRI, was set up, which

remains the nerve center for providing cutting edge technology. In a

short span of time it has emerged as the 17th largest tyre manufacturer

in the world an achievement in itself.

JK Tyre is the only manufacturer of truck/ bus steel radial tyres, and

the second largest manufacturer of 4-wheeler tyres in the country.

Also, JK Tyre is the largest exported tyre brand from India. It was

awarded the CAPEXIL's Highest Export Award for 1997-97 by FIEO. It

enjoys preferred premium brand status in Truck Bias market in USA

and across many markets in Africa, Middle East and South East Asia.

4.2.1. Operation in North–East India:

The company started its operation in North – East India in the

year 1977.

Regional Set -Up:

It has an area office at Guwahati.

It has depots in Shillong, Dimapur and Agartala which

are operated by C & F agents.

Organizational Set-Up:

Area Manager

Sales Officer Service Engineer

Sales People Commercial Staff


East for various tyre segment in 2004 are as follows:

Table 4.4: Tyre Potential of North East Acc. To JK Tyres

Type of Tyre In Nos.

HCV 17500(App.)

LCV 6700(App.)



Average monthly sales ( in units ) in 2003-04

Table 4.5: Average Monthly Sales

Type of tyre In Nos.

HCV 3400 (App.)

LCV 1474(App.)



Avg. Monthly Market Share of HCV Tyre: 20%

The company considers Bridgestone, Goodyear and Apollo

Tyres Ltd. as it nearest competitor.

Average yearly sales in the last three years :

Type of tyre 2001 2002 2003

Truck Tyre 28045 32252 37090

Radial tyre 6000 7200 9600

Table 4.6: Average Yearly Sales of JK Tyres

4.2.2. SWOT Analysis of JK tyres:

Strength : Better customer services, brand

awareness and operational efficiency

.

Weakness: Less dealer network and low on

retreadibility.

Opportunities: High demand for LCV tyres and in

radials.

Threats: Competition from low priced brands like

Birla, Poddar.

4.3. CEAT Limited:

CEAT Ltd., one of the oldest among RPG companies, is one of

India’s leading tyre manufacturers, with an annual turnover of Rs.1500

Crores (US $ 310 Million). It manufactures and markets “CEAT”

branded automotive tyres, tubes and flaps. It has a strong presence in

the domestic and export market. CEAT’s strong commitment towards

providing excellent service and support to its buyers and customers

has also helped it to maintain the leadership position in most of the

markets. CEAT stands committed to continuously improve the quality in

all its products and services to satisfy current and emerging customer

needs.

CEAT International was first established in 1924 at Turino in Italy. It

started off making cables for telephones and railways. CEAT stands for

Cavi Electrici Affini Torino (Electrical Cables and Allied Products of

Turin). In 1958, CEAT Tyres of India Ltd is incorporated in collaboration

with TATA Group of Companies, and is listed on Bombay Stock

Exchange. In 1982, RPG Group takes over CEAT Tyres of India, which

becomes CEAT Ltd in 1990

CEAT has the widest range of tyres for all user segments in India.

Product segmentation, depending on usage needs like overloads, road

conditions and vehicle abuse, can create market fits for these specific

needs. CEAT has created products for each of these segments and

thereby has a cutting edge in this specific market.

CEAT has been exporting tyres since 1964, which has helped it in

getting a firm foothold in export markets. CEAT has now 14% export

market share among Indian companies. Tyres are exported to more

than 30 countries worldwide. Its main business links are in the markets

of Singapore, with 64% market share, UAE, with 42% market share,

Philippines, with 22% market share, USA, Bangladesh, Pakistan,

Vietnam, Iran, Nigeria, Egypt and other African, Middle-East and Far-

East Asian countries. CEAT also produces tyres, which meet the

requirements of international standards: DOT standard (Department of

Transportation), to be able to export tyres towards the USA and IN-

METRO standard to be able to export towards the Latin-American

countries. CEAT’s continuous effort and outstanding export

performance have been recognized by AIRAI & CAPEXIL with several

awards for 10 consecutive years

CEAT has a technical tie-up with Yakohama of Japan for the

manufacturing of radial tyres. Presently Ceat caters primarily to the

replacement market. Due to the strong growth in the OEM sector, the

share of the replacement market in the total revenue of the company

has fallen. However, the production growth in the automobile sector

over past few years should provide a boost to the replacement market

in the coming years and Ceat could be a major beneficiary thereof.

4.3.1. Operation in North–East:

The company started its operation at Guwahati in 1962.

Regional Set-up:

Regional office – Guwahati.

C & F agents – Shillong, Tinsukia. Agartala.

Organizational Set -Up:

Regional Manager

Sales Officer Technical Engineer Commercial Officer

Territory Manager Clerical Staff


East for various tyre segment are as follows :-

Table 4.7: Tyre Potential of North East Acc. To CEAT in 2004


HCV 17500(App.)

LCV 6500(App.)



Average monthly sales ( in units ) in 2003-04



HCV 1925 (App.)

LCV 910(App.)




The company considers MRF Ltd and JK Tyres Ltd. as its

nearest competitor.


Table 4.9: Average Yearly Sales of CEAT

Type of tyre 2001 2002 2003

Truck Tyre 15880 18260 21000

Radial tyre 4500 5200 6000

4.3.2. SWOT Analysis of Ceat Ltd :

Strength : Wide range of products, liberal claim

policy and good brand image.

Weakness: Low on the replacement market and tyre

quality also week in the Truck segment.

Opportunities: Production growth in the automobile

sector may lead to a growth in the

replacement market. Enormous

opportunities in the upcoming

scooter/motorcycle tyre market.

Threats: The entry of multinational into tyre market

may have an adverse effect on its thin

profit margins.

4.4. Goodyear India Limited:

Goodyear is an American company with its headquarter at Akron

(U.S.A). its Indian subsidiary, Goodyear India Ltd. has its head office at

New Delhi. The company operates two factories at Aurangabad and

Faridabad. It has a large country-wide sales & distribution network of

2500 retailers.

The thriving Indian car market with seven-digit annual growth

volumes has flared up adrenaline levels within the global management

of the world’s largest tyre maker, the $14-bn Goodyear Tire &

Rubber.Goodyear completely re-engineered its premium ultra-high

performance passenger radial tyre, the Eagle F1 GS-D3, for launch on

Indian roads in the month of August,2004.

Developed at Goodyear’s technical centre in gothic Luxembourg,

the re-engineered Eagle F1 GS-D3 just made the grade at Goodyear’s

Mireval proving grounds by the shores of the Mediterranean. Pitted

against rivals, the Bridgestone ‘Potenza’ and the Michelin ‘Precede’,

Goodyear’s Eagle F1-GS-D3 sped away with top honours in a series of

rigorous tests before worldwide auto-enthusiasts in the Mireval

powerglide. Time will tell whether the Eagle F1 GS-D3 is bound for

glory on Indian roads. The premium tyres will soon be shipped out of

Goodyear’s factories in Thailand and Malaysia to India. In fact,

Goodyear has already lined up the Eagle F1 GS-D3 pricing strategy for

India. For starters, they will be priced in the Rs 3,500-Rs 5,000 band

per tyre in a clear bid to take on the likes of rivals Michelin and

Bridgestone in India.

Incidentally, the launch of the customised Eagle F1 GS-D3 in India

will mark the first simultaneous launch of a Goodyear flagship product

across all Asia markets. Something which Goodyear Asia president,

Hugh Pace calls the “internationalisation of the Indian tyre market

within Goodyear’s global eco-system”.

Goodyear’s new version Eagle F1 has been re-engineered for key

Asian markets like India where auto enthusiasts demand high

performance in a value package. Given the success of the Eagle F1

GS-D3 in the US and Europe, it is hopeful of replicating the same

experience in India, where the tyres will cater to the swiftly expanding

D/E segments. The Goodyear management is aware that India is

among the fastest growing automotive markets in the world.

Goodyear can significantly benefit from this and consolidate its

$200-m presence in India, which is a key emerging market for high-end

passenger radials. Be that as it may, the total market size of India’s D

& E segments remains well below a modest 30,000 and Goodyear’s

Eagle F1 GS-D3 will doubtless be positioned as a niche product, aimed

at rich and super-rich car owners.

4.4.1. Operations in The North-East:


Regional Set-up: The Company has a district office in

Guwahati.


(Aurangabad, Faridabad) (Through C & F agents)

Organizational Set- Up:

District Manager

Professional Business Counselors (Service Engineers)

District Operating Manager

Branch Supervisors

Godown Clerk


East for various tyre segment are as follows :-

Table 4.10: Tyre Potential of North East Acc. To Goodyear


FACTORY GODOWN DEALERS

HCV 17000(App.)

LCV 6500(App.)



Average monthly sales ( in units )

Table 4.11: Average Monthly Sales


HCV 510 (App.)

LCV 390(App.)




The company considers MRF Ltd, J.K tyres and Apollo Tyres



Table 4.12: Average yearly sales of Goodyear

Type of tyre 2001 2002 2003

Truck Tyre 4206 4840 5560

Radial tyre 1000 2500 3600

4.4.2. SWOT Analysis of Goodyear India Ltd :

Strength : Quality, brand awareness, customer

perception.

Weakness: Dealer Network and Less manpower and

offices in North-East. Reducing market

share overall in the North east.

Opportunities: Growth in LCV & HCV segment may

lead to more market share. Also good

scope in the Radial segment.

Threats: Market consolidation and expansion by the

market leaders of the various segments

in a highly competitive market.

4.5. Birla Tyres:

Birla Tyres is one of the youngest tyre companies in India. It is also

one of the first to win the coveted ISO 9001 certification for excellence

in quality management specific to design development and production

of tyres, tubes and flaps. It has a tie-up with, Pirelli Ltd. of Italy, the

legendary world leader in tyre manufacturing.

Every year one million tyres and tubes roll out of the integrated

facilities from its factory to Balasore (Orrisa). Each tyre, carrying the

seal of Birla quality Assurance, is designed to bring the highest levels

of efficiency, performance, value and satisfaction to buyers and users

throughout India and more than 25 countries. The company started its

operation at Guwahati in 1963.

4.5.1. Operations in the North-East:


Regional Set-up: The Company has a C&F office in Guwahati,

which oversees all its operation in the North- Eastern region.


(Balasore, Orrisa)

Organizational Set-Up:

Regional Manager

District manager Service Engineer

Marketing Executive Assistant Service Engineer

(C & F employees 7 – 10)

FACTORY C&F OFFICE CUM GODOWN DEALERS


East for various tyre segment in 2004 are as follows :

Table 4.13: Tyre potential of North East Acc.to Birla Tyres


HCV 17500(App.)

LCV 6500(App.)



Average monthly sales ( in units )



HCV 2275 (App.)

LCV 325(App.)




The company considers MRF Ltd, J.K tyres and Apollo Tyres



Table 4.15: Average yearly sales of Goodyear

Type of tyre 2001 2002 2003

Truck Tyre 18760 21580 24800

Radial tyre 480 960 1800

4.5.2. SWOT analysis of Birla Tyres :

Strength : Low pricing, latest technology from Pirelli. Good

brand name of the Parent Company.

Weakness: Poor dealer network and offices in North-East

and less promotional activities. Non-core

business of the Birla Group.

Opportunities: Encouraging response from the market within a

short period of time.

Threats: Far behind market leaders in terms of market

share.

Chapter V: FINDING AND ANALYSIS

5.1. From the fitment survey:

The Fitment survey revealed not only the complete market share of the

brands in the HCV segment, but also the front and rear alignments. This

shows that Apollo Tyres rules this segment, closely followed by MRF,

especially in the rear tyre share.

5.1.1 Market share of HCV tyre

Market Share Overall (260 vehicles: 1560 Tyres)

Market share of front alignment (260 Vehicles: 520 Tyres)

Market share rear alignment (260 Vehicles: 1040 Tyres)

5.1.2 Market share of LCV Segment

Market Share Overall (156 vehicles: 936 Tyres)

5.2. From the customer survey:

Analysis methodology:

Now in order to analyze the rankings, points were allotted to every

rank, with rank 1 getting 6 points, rank 2 getting 5 points, rank 3

getting 4 points and so on till rank 6 getting 1 point.

5.2.1 For best mileage:

HCV Customers

Analysis:

We see here that MRF is rated as the best tyre for mileage in this

segment, Apollo in second and not far behind. MRF’s premium tyres

for mileage are Super Lug and Super Miller (1000x20) and M77 and

Supper Miller (900x20). Whereas in Apollo’s Premium Tyres are XT-7,

XT-9 and Amar Deluxe. It is noticed that one brand, ST-5 is competing

against M-77 of MRF. Though they are of the same pattern (Semi

Lug), M77 is considered superior to ST-5 in terms of mileage.

LCV Customers

Analysis:

MRF’s Supper Miller and M77 (Rib Pattern) are the premium

tyres in this category. These tyres are known for giving the best

mileage, whereas Apollo’s Amar Delux and Milestar are also giving

good mileage, but the customers rate them at second place after

MRF. Similarly JK’s Jet Rib and Ceat’s FM Sleek are good for mileage

and are rated just below Apollo.

5.2.3 Rankings for best retreadibility:

HCV Customers

Analysis:

The Customers rate MRF best in terms of Retreadibility. Its M77

(Semi Lug) and Super Miller (Rib) can be retreaded almost 4 times.

One important point here is that MRF has a high probability of cut

expansion, so the question arises as to how a tyre with high

probability of cut expansion give high retreadibility. The answer to this

is that, if the tyre has not suffered a cut, and is brought in time for

retreading then it gives an excellent retreadibility. Similarly JK and

Apollo are good in retreadibility. They can be retreaded 2 to 3 times.

Apollo’s good retreadable tyres are the lug and semi lug tyres like XT7

(lug), ST5 (semi lug) and Haulug (lug). It is observed that the Rib tyres

of Apollo like, Amar and Amar Delux, are not very good in terms of

retreadibility. They are good as mileage tyres but they tend to develop

Shoulder Cracks, in a number of cases, after one resoling.

LCV Customers

Analysis:

As in the HCV category, the LCV category rate MRF as the best in

retreadibility and say that it can be retreaded 3 to 4 times. Here too

the tyres are M77 and Super Miller. Apollo and JK follow and are said

to be good for retreading. Apollo’s good retreading tyres in this

category are Milestar and XT9. The similar problem regarding rib

pattern tyres like Amar and Amar Delux is noticed in this category too.

Another interesting point noticed in the LCV segment is that there is

no choice for Apollo customers in the Semi Lug pattern. Earlier there

was a brand called ‘Anchor’ in this category, which was later

withdrawn by the company. The customers say that it was a good tyre

and now that it’s not available in the market, they have moved to other

brands of MRF or JK etc. Infact most of the customers say that M77 of

MRF has taken almost all the share of Anchor. The above statements

could be few of the reasons why MRF and not Apollo Tyres has the

largest market share in the LCV segment.

5.2.4 Rankings for Least Probability of CUT EXPANSION:

HCV Customers

Analysis:

The HCV customers ranked Apollo and JK as having the least

probability of cut expansion. This is one of the reasons why Apollo

Tyres has the largest market share in this segment. Few of the drivers

said that Apollo Tyres has a high degree of cut expansion. On further

investigation we came to know this happens at times, because these

drivers overload their trucks, much ahead of the lead permissible.

Therefore tyres in these vehicles suffer from cuts and due to overload

they expand. Tyres like Super Rib and Haulug are meant for normal

loading but still truck drivers use these for overloading. But the general

consensus and the overall rankings indicate that Apollo’s tyres show a

very low probability of cut expansion.

On the other hand MRF here shows its major weakness. It has a

very high probability of cut expansion. The reason for this is that they

are mainly mileage tyres and good for highways and normal loading.

Because of this character they suffer from high probability of cut

expansion.

Another point noticed is that many drivers are not aware that every

tyre has its own application, uses or benefits. Therefore sometimes

tyres like Haulug and Super Rib, which are meant for normal loading,

are used for overloading. If the right tyre is used for the right

application, it will benefit the customer and eventually the company.

Many drivers are also not aware of how to avoid cut expansion.

They use primitive methods like cutters to repair them. But this

actually spoils the tyre after some time.

LCV Customers

Analysis:

Here too we see that Apollo and JK are ranked as the top two and

MRF at the bottom. This is the only place where MRF scores low in

this category. The same reasons as, identified above in the HCV

segment, apply here too. But this segment suffers relatively low cut

and cut expansion problems. The tyres here carry relatively low

weight.

5.2.5 Rankings for Least probability of air formation:

HCV Customers

Analysis:

The customers rate as the best in terms of least Air Formation

MRF’s Super Miller and M77. Followed by XT7, Loadstar, and XT9

etc of Apollo Tyres. They are considered good in this parameter. This

is one of the reasons why MRF and Apollo have the maximum market

share in this segment. JK, Birla and Ceat show similar performance in

this category and are rated much lower.

LCV Customers

Analysis:

Here again air formation is the least in MRF. Its premium tyres are

M77 and Super Miller in LCV segment too. Apollo tyres is rated good

by the customers. Amar Dlx and Milestar show very low probability of

Air Formation. But about 12 customers said that Apollo’s Amar has a

problem of air formation. The rest of the tyres are good. JK (Jet Rib)

follows closely. It is also considered good in terms of low air formation.

Ceat and Birla just show an average performance.

5.2.6 Rankings for best tyre for heavy loading:

HCV Customers

Analysis:

The analysis shows that Apollo tyres is considered the best tyre for

heavy loading. Loadstar, Hercules and XT7 of Apollo are the premium

tyres in the HCV segment. Loadstar is the most wanted tyre when one

is looking for overloading. Apollo Tyres hold the largest market share

in the HCV segment, and the credit goes to tyres like Loadstar, XT7

etc. Apollo is followed by JK and MRF. JK offers Jet Track 39 and

MRF offers Super Lug 78 and Super Lug 90. Both the companies offer

good tyres for heavy loading. This is followed by Birla, which is

relatively low in the rating with only 326 points, showing just an

average performance. Ceat offers HCL 80, but shows a poor rating for

heavy loading.

LCV Customers

Analysis:

As in the HCV segment, Apollo Tyres score maximum in terms of

heavy loading, with Loadstar and XT7, in this segment too. It is

followed by MRF and JK, which get almost equal points. JK and MRF

offer Jet Track and Super Lug in this segment. This analysis also

substantiates Apollo’s supremacy in terms of Heavy Loading. This

perhaps is one of the reasons why Apollo and MRF have a high

overall Market Share in this segment.

5.2.7 Rankings for best Claim Settlement and After Sale Policy:

View of the HCV and LCV customers

Analysis:

An overall view of all the HCV and LCV customers has been

taken. This is done after discussions with the management of Apollo

tyres and a few dealers. It was stated that the companies do not

differentiate between segments in its policy for claim settlement.

Therefore and overall ranking was considered.

Here we see that JK, Birla, and MRF give a good response

towards claim settlement, whereas Apollo is ranked relatively low. A

very important observation was that if we take the views of customers

of Guwahati city only, then the ranking of Apollo tyres is very high

along with MRF and JK tyres, but when it comes to smaller towns like

Nagaon, Hojai, Dimapur etc, then the rankings are relatively low. This

shows that the claim settlement policy is well implemented in the

major towns like Guwahati, Tinsukia, but poorly implemented in the

smaller towns. Many customers in towns like Nagaon and Hojai said

that the company sometimes takes as much as three months to give a

verdict on a tyre that has been sent for claim.

5.2.8 Rankings for best Sales Promotion Devices

HCV and LCV Customers

Analysis:

Here both the HCV and the LCV segment’s analysis has

been done together, as we saw during the course of the study

that there is almost no difference in the sales promotion

activities performed by the companies for these two segments.

Apollo definitely offers the maximum schemes, gifts, coupons

etc, from time to time, for the drivers/ owners. The other brands

have similar ratings and are placed low in the tally. These

companies offer very limited schemes, and that too between

long gaps. Apollo’s Unconditional Warranty Campaign is a hit

among the truck drivers.

5.3 From the Dealers Survey:

5.3.1 Dealer’s monthly sale of Apollo tyres

Analysis:Here we have analyzed 45 dealers from Guwahati,

Shillong, Nagaon, Tinsukia, Dimapur, Silchar and Itanagar. The

maximum number of dealers lies in the range of 151 to 300.

Discussions with the management revealed that Apollo takes a

great care while appointing dealers and has a healthy dealership

policy. They don’t want to have very small inefficient dealers nor

do they want to rely on just one or two big dealers, which become

a risky affair. This can be substantiated by the fact that there are

only a few dealers at the extreme ends. And the major

concentration is in the range of 151 to 300 sales per month. There

seems to be a good balance between the kinds of dealerships that

Apollo has. This is one of the reasons why Apollo has emerged as

the Market leader and has shown a tremendous growth.

5.3.2 Findings from the 4 point Liekart Scale

Methodology: The dealers had to rate every company on different

parameters as Excellent (1), Good (2) Average (3), Poor (4). A sum

total of all these points, for every company, from the 45 dealers was

found out and an average was taken to find out the overall rating for

that parameter.

Rating for quality of HCV tyre

Ratings ATL MRF JK BIRLA CEAT G’YEAR

Excellent 1.2

Good 1.94

Average 2.61 2.90

Poor 3.75 4.12

Rating for quality of LCV tyre


Excellent 1.32

Good 2.13 1.64

Average 2.73 2.67

Poor 3.71

Analysis : These were the results of ratings for quality.. It was made

clear to the dealer that with Quality we meant an overall view in terms

of Mileage, Retreadibility, Cut expansion etc. The dealers rate Apollo

tyres number one in HCV segment. The best tyres in that category

were XT7 and Loadstar. MRF’s Supper Miller, Super Lug and M77

were considered good. But when it comes to LCV segment, then

Apollo’s ratings seem to go down. Though it has been rated good,

there were a few complaints against Apollo tyres in this segment. Many

dealers said that in the semi lug pattern there was no choice for

customer. Earlier they had Anchor, which was considered very good,

but was later withdrawn form the market. Now M77 of MRF has taken

its share. There is a severe need for a good tyre in this pattern. Also a

few customers told us that Amar and Amar DLX develop shoulder

cracking just after one resoling. Dealers have suggested improving the

quality in this segment.

Rating for communication


Excellent 1.34

Good 1.94

Average 2.87 3.31 2.56 2.63

Poor

Analysis: Communication includes timely information about policies,

documents, schemes, dealer and customer meets. Here we see that

Apollo is just given an average rating by the dealers. Here MRF scores

above all. From the depth interviews, it was noticed that dealers were

really satisfied with the professionalism displayed by MRF. In case of

Apollo Tyres, the dealers were quite satisfied in Guwahati city where

the rating is Good(1.56). but when it comes to the smaller cities like

Nagaon,Silchar , Dimapur etc where there are less number of dealers,

then there seems to be a problem. Many dealers said that they are only

told about a scheme after quite some time has lapsed. Many said that

Apollo used to hold dealer/ customer meets earlier, but in the last two

years, this has drastically reduced.

Rating for claim response


Excellent

Good 1.77 2.04 1.74

Average 2.53 2.68 2.72

Poor

Analysis: As stated earlier, Apollo tyres is not considered very good at

claim response by the customers. The dealers have also given it an

average rating.

Here too it seems that the company’s response is very good in

Guwahati and nearby areas, but the smaller areas seem to be

neglected. A few dealers said that sometimes the company takes up to

3 months to pass or reject a tyre. In such situations the dealer is the

one who gets into trouble with the customers.

Rating for incentive schemes

ATL MRF JK BIRLA CEAT G’YEAR

Excellent 1.2

Good 2.33 1.97

Average 2.73 2.66 2.60

Poor

Analysis: Apollo definitely scores above all in this parameter. Its

Annual sales programme is considered to be the best by the dealers.

Its Gainz Unstoppable program has a lot of offerings in terms of travel,

vehicles and other commodities. Its Apollo Jewels Philosophy has been

a success throughout 2003-2004. The dealers appreciate the incentive

programmes and this is definitely a reason for success of Apollo tyres

in the Tyre Industry. There were just a few dealers, who had lower

counter potential, said that these schemes cause unnecessary price

wars between the dealers. They say big dealers lower the price even

below the margins, in order to win rewards through these incentive

schemes.

5.3.3 Growth of HCV tyre Industry in North-East Market:

Growth of Apollo In HCV segment:

Years Monthly Sale (Nos.) Growth

2000-2001 12500 ---------

2001-2002 13500 8.0%

2002-2003 15000 11.1%

2003-2004 17000 13.3%

Years Monthly Sale (Nos.) Growth

2000-2001 2660 ---------

2001-2002 3550 12.2%

2002-2003 4600 19.3%

2003-2004 5100 29.1%

Market share of Apollo

Growth of Apollo Tyres visavis North-East market

Market Share

2000-2001 22%

2001-2002 26%

2002-2003 29%

2003-2004 30%

Chapter VI: SWOT ANALYSIS

6.1 Strengths:

Leadership in the Heavy Loading Segment with the best quality

tyres like Loadstar, XT7, XT9, Hercules etc. and it also leads

the replacement market in car radials.

Apollo tyres has a wide spread all India distribution network

and a well entrenched distribution system of over 5000

dealerships of which over 3000 are exclusive outlets under the

brand name “Apollo Tyre World” and another 100 called

“Apollo Radial World”.

The acquisition of Premier Tyres has enabled Apollo Tyres to

increase its market share. Alliances with Michelin will lead to

world-class products and technology, which will prevail in the

Indian market in the coming years.

Apollo Tyres has a wide range of tyres to cater to the needs of

every segment in the market. Kaizen Tyres, introduced by

ATL, is established as a value for money brand at the lower

segment of the market.

Apollo Tyres is extremely sensitive to the trends/customer

behaviour; this ability enables it to deliver superior strategic

plans.

Apollo tyres have established a tradition of technological

excellence, innovation and adaptability to change that has

enabled it, over the years to increase its market share. All its

regional offices and C&Fs are well connected to with each

other including the Head Offices.

Leadership attitude, energy and aggression in the market

place with motivation are the cultural hallmarks that bring

individuality, productivity and success as a team.

Apollo Tyres has the best Customer Friendly policies. It comes

out with sales promotion activities on a regular basis. Recently

it introduced ‘Dikha Ke Le Lo Offer’ and has an ongoing

scheme of Unlimited Warranty. It also from time to time

conducts consumer and dealer meets.It has the best dealer

incentive schemes like ‘Apollo Jewels’. This scheme has been

very successful and a lot of dealers have won foreign trips.

6.2. Weaknesses:

The pricing of Apollo tyres is generally considered to be high in

the price sensitive Indian market.

Apollo Tyres puts less emphasis on mass media promotion.

Except the truck and bus tyre segment, there is very low

customer awareness about the features of Apollo Tyres,

especially in the passenger car segment.

Low presence in car OE segment and no presence in

two/three wheeler segment

6.3. Opportunities:

Large replacement markets and also unexplored market in the

2/3 wheelers tyre segment.

Radialisation in commercial vehicle segment and wide

opportunity for Original Equipment (OEM) segment of the

market.

Continued absence of a leading player (Modi Continental).

Establish leadership position in farm tyre segment and use

dominant position in commercial segment to leverage new

business opportunities.

National Highway development Programme of the Government

of India driving significant change in the road transportation

industry.

6.4. Threats:

6.4.1 External

Increased retreading by bus operators.

Cheap imports from China and far east

No entry barriers for new entrants such as new

multinationals and inclination towards foreign

brands.

Sign of recession in the economy and political

uncertainty

6.4.2 Internal

Upward trend in natural rubber prices

Multi-brand dealers give preference to other

brands while pushing sales for more margins.

Chapter VII: SUGGESTION AND CONCLUSIONS

7.1. Suggestions

After analyzing the data collected through sample survey, the

author wishes to make some suggestions and recommendations for

the overall development and improvement of service of Apollo Tyres

Ltd. Presently it needs to pay attention on the following points:

7.1.1. Building of brand image:

From the various responses received, it can be pointed out that

the first and foremost challenge in front of Apollo Tyres Ltd. is the

building of brand image. The brand image can be further improved by

applying:

Media advertising

Road shows and exhibitions

Meets, conventions etc.

Research and development

7.1.2. Entering into the 2/3 Wheelers segment:

ATL can also venture into 2/3 Wheelers tyres segment as the

countrywide sales of this segment is growing tremendously. Preference

for motorcycles is growing and the topography of the North-astern

region is more suitable for motorcycles. Thus this fast growing segment

has created a lot of opportunities for growth.

7.1.3. More incentives to Dealers:

ATL must give more incentives to dealers like cash discounts, slab-

wise discounts, etc to help them to push the sales. Also attractive awards

should be given to the dealers giving a high rate of sales in each district. Also

the multi-brand dealers should be motivated to push Apollo tyres over other

brands by convincing them of more benefits.

7.1.4. Opening of more offices in the North-East:

ATL has not been able to serve every market and every sector

in the North-East. To serve the North-East market more efficiently, ATL

should open more offices in the region. At present there are no offices

in the states of Arunachal Pradesh, Manipur, Nagaland and Mizoram.

So the company should consider opening up offices in those states.

7.1.5. Serving customers through Internet and banking facilities:

ATL needs to focus extensively on introducing information

technology to serve its customers in a better way and to retain them.

ATL can go for accepting customer orders/complaints online, which

saves a lot of time and cost. Internet can also enable a customer to ask

lot of questions about product information and pricing options so that

he can make his purchase decision and can order his product on the

net itself. Further the company can tie-up with any banking

organization to facilitate to secure payment mechanism.

7.1.6. Sufficient number of efficient technical manpower:

To effectively handle an increasing number of

claims/complaints, the company has to make sure that it has sufficient

technical manpower with network so that action can be taken within a

specified time without any delays. Performance of service employees

should be such that they regard service/claim problems as an

opportunity to excel company’s image.

7.1.7. Concentration on exports:

In case of recession in the domestic market tyre market,

problems like over-capacity and high levels of inventory can be

overcome by concentrating upon exports of its tyres to neighboring

countries and in the international market. Apollo should strive hard to

export its tyres in the foreign markets.

7.2. Conclusions:

The tyre industry comprises of five major organizations at

the top end, contributing nearly 80 percent of the total industry

turnover. At the middle and lower levels, there are a number of small

players manufacturing low technology products such as small tyres,

tubes and flaps. Being an ancillary product, the trends in the industry

closely follow those in the automobile sector. In turn the automobile

industry is a reflection of the overall growth rate of the economy and

the various core sector industries.

The company has market leadership in the truck replacement

segment with brands such as XT7, Loadstar Super, Amar enjoying

customer preference and backed by a strong dealer network and also

enjoys significant presence in tractor OE segment and today has a

presence in the car OE segment with supplies to two of the country’s

largest manufacturers, namely Maruti Udyog Ltd. and TELCO. Today

the company has the widest portfolio for commercial vehicles, thus

offering customers enhanced choice and the right product for every

need. It continues to be innovators and pathbreakers with Farm King,

India’s first farm radial tyre, continuing to be the only one of its kind in

the industry. However it is lagging behind in the medium and

passenger car segments. The company should look at consolidating its

position in the industry with aggressive and innovative strategies,

continued focus on cost optimization and customer delight. There has

been a firming up of input prices mainly Natural rubber, which is a

major component of the raw material cost, which may affect the

margins. Also the industry’s fortunes are linked to the automobile

industry, which is cyclical in nature. Most of the raw materials are

petroleum based and their prices are linked to the movement of the oil

prices. The introduction of Kaizan tyres targeted at the price conscious

customers is a good move taken by Apollo and to face the strong

competition from other low priced brands from Ceat and Birla tyres. It is

also obsrved that exclusive dealers have the maximum share of the

sales of its tyres. The multibrand dealers give more preference to other

brands in case of more margins while pushing sales. Due to the cut

throat competition in the tyre market, it has become imperative for

Apollo tyres to motivate the multibrand dealers with more incentives to

push sales of its tyres in order to maintain it’s market share as well as

growth. Building up its brand image is essential to fight with rivals like

MRF, JK and to withstand the threat from multinationals.

BIBLIOGRAPHY

1. I.T.T.A.C. STANDARDS MANUAL; Pages: 1-06 to 1-09

2. ‘TYRE TECHNOLOGY AND MANUFACTURE'- Apollo Tyres

Ltd.

3. MARKETING MANAGEMENT - The Millennium Edition by

Philip Kotler, Prentice-Hall of India Pvt. Ltd., New Delhi,

2000.

4. ENCYCLOPAEDIA BRITTANNICA, Micropaedia, Ready

Reference and Index, X, Addenda; Page 1.

5. INDIAN AUTO - "Treading the path" by Ardeshir Ashley

Baxter; Issue: January 1999; Pages 96-104.

6. FROM QUEST TO CONQUEST-A leaflet by Apollo Tyres Ltd.

7. ANNUAL REPORT, 2003, Apollo Tyres Limited.

8. TECHNICAL DATA BOOK- Apollo Tyres Ltd.

9. Websites - (i) www.apollotyres.com

(ii) www.domain-b.com

(iii) www. indiainfoline. com

http://www.domain-b.com/

http://www.apollotyres.com/

Appendix I: QUESTIONNAIRE

Questionnaire for Dealers

Dear Sir,

We are management students from New Delhi Institute of

Management. As a part of my summer training in Apollo Tyres Ltd, I

am conducting a survey on the topic “A study of the growth of Apollo

Tyres Ltd”. I hence request you to please spare a few minutes of your

precious time and answer the following questions.

I shall be highly obliged to you for your kind co-operation.

Thanking you,

Yours truly,

1. Name of the Dealer:

2. Category of the Dealer: Exclusive Multiple

3. Companies Dealing in (Tick the appropriate boxes):

Criteria ATL MRF Ceat JK Birla B’stone Goodyear

Truck LCV P Radial P Bias

4. Counter Potential: …………….

Category↓ ATL MRF Ceat JK Birla Goodyear

Truck

LCV

P/ Radial

P/ Bias

5. Opinion of the dealer for the companies dealing in:

Rating CodeExcellent 1

Good 2Average 3

Poor 4

Criteria ATL MRF Ceat JK Birla B’stone GoodyearProduct quality Communication After Sales Service/claims Dealer Incentive

Appendix II: QUESTIONNAIRE

Questionnaire for Drivers/ Customers

Name: …………………………………………………………………………….

1. Please indicate the tyre brand (Apollo, MRF, JK, Birla, Ceat, Goodyear etc…)

Vehicle Type

VehicleNumber

Front Wheel

Left

Front Wheel Right

Rear Wheel

Left Inside

Rear Wheel

Left Outside

Rear Wheel Right Inside

Rear Wheel Right

Outside

HCV

LCV

2. Please Rank the following companies for each question:

Rating CodeExcellent 1

Good 2Average 3

Poor 4Criterias ATL MRF Ceat JK Birla B’stone Good

yearMileage Retreadability Least probability of cut expansion Least probability of air formation Heavy loading After sale policy(Defect claim/Settlement) Sales promotion devices(gifts,draws,coupons,schemes,seminar etc.)

REMARKS ( If Any) :

Appendix III: DISTRIBUTION NETWORK

Appendix IV: FINANCIAL RESULT

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